Audit committee reviews bond propositions and NYSERDA grant plan for geothermal work at two schools

The Newburgh City School District Audit and Finance Committee on a Tuesday evening discussed voter authorization and funding plans for proposed geothermal conversions at two district schools, including grant applications to the New York State Energy Research and Development Authority (NYSERDA) under the Clean Green Schools program and the use of a bond and district capital reserves to cover local costs.

District staff said the district has applied for the Clean Green Schools grant and that the request is for up to "$5,000,000 per building." "So the grant has already been applied for," a district staff member said. Another district staff member summarized the financing sequence: voter authorization for the proposition is required before the district can seek New York State building aid, and those building-aid payments would be used over time to cover the local share of the project.

Committee members pressed for clarity on potential tax impacts and contingency plans. "In the last meeting, it said funding from US Building Aid, Clean Green Schools funds, and the district's capital reserve up to $3,000,000 if needed. And there's supposed to be no tax impact. So what I'm understanding is that there could be a tax impact," a board member said. A district staff member responded that the district does not expect a tax impact because building aid and grants should cover the local share and the capital reserve would act as a buffer while costs are finalized.

Members discussed rough budget numbers and feasibility risks. One committee member described the bond as "really nothing more than a loan" and asked about amortization and interest, noting that the district had not yet issued that specific bond and that current market interest rates would need consultation with fiscal advisers. Staff cautioned that the bond term would likely be matched to building-aid schedules, which they said typically would not extend to a 30-year amortization for a non-new-construction project.

The committee also discussed design and site feasibility questions. Staff said additional subsurface site investigation and detailed design work would be required to determine the number of geothermal wells or the feasibility of alternative loop systems (for example, ground loops vs. pond loops), and that the district must secure NYSERDA funding commitments before proceeding far into final design. "We do have to have voter authorization for the proposition in order to seek building aid," a district staff member said. Staff added that, if the grant money were not awarded or design work showed the project was infeasible at a given school, the district could halt that portion of the project rather than proceed at local expense.

Committee members asked for further financial modeling, including return-on-investment analysis and comparisons with existing heating costs; staff said such analyses require firmer design information and can be developed as the project moves from concept to design.

The committee also opened with an agenda item authorizing the president of the Board of Education to execute an engagement letter from RBT CPAs LLC dated March 26, 2025; the engagement letter was placed on the agenda for incorporation into the meeting minutes (action text read into the record). The transcript does not record a vote on that authorization during the excerpt provided.

Next steps described in the discussion included seeking voter authorization for the propositions on the regular agenda (items 86, 87 and 88 were cited), securing NYSERDA approval for the Clean Green Schools grants, completing site testing and design to refine cost estimates, and coordinating bond sizing and amortization schedules with building-aid timelines. Staff said they would provide updates as the project advances through design and testing.

The committee adjourned after the discussion.